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Universal basic income: A feasible alternative to move people out of poverty in Mexico?

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  • Caamal-Olvera, Cinthya G.
  • Huesca, Luis
  • Llamas, Linda

Abstract

This paper evaluates the effectiveness of social policy to alleviate poverty in Mexico; where poverty is persistent, social programs are numerous and complex to monitor. Our analysis uses MEXMOD tax-benefit microsimulation. We simulate four scenarios that grant direct money transfers to individuals in multidimensional poverty, elderly people, families with children under 15 years old, and a universal basic income. The more generous and broader the coverage is, the costlier the policies. The first-best policy is the universal basic income, which can eradicate extreme poverty at the cost of 10.61 % of the gross domestic product. The least effective policy transfers only to older people.

Suggested Citation

  • Caamal-Olvera, Cinthya G. & Huesca, Luis & Llamas, Linda, 2022. "Universal basic income: A feasible alternative to move people out of poverty in Mexico?," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 1077-1093.
    • Handle: RePEc:eee:jpolmo:v:44:y:2022:i:5:p:1077-1093
    DOI: 10.1016/j.jpolmod.2022.07.005
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    Cited by:

    1. La, Jung Joo, 2023. "Macroeconomic effects of basic income funded by land holding tax," MPRA Paper 116151, University Library of Munich, Germany.
    2. La, Jung Joo, 2023. "The macroeconomic effects of basic income funded by a land-holding tax in Korea," Journal of Policy Modeling, Elsevier, vol. 45(1), pages 1-9.

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    More about this item

    Keywords

    Poverty; Universal basic income; Conditional transfers; Microsimulation;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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